EPLI: Employee Practices Liability Insurance

Imagine for a moment you've terminated a long-standing senior manager from your business. After years of alienating his co-workers, customers, and exhibiting a lack of interst in his job, the senior manager felt he'd earned the right to "coast until retirement."

Frustrated with the decision, the senior manager retaliates by suing your company for ageism practices. On top of that he files a charge of discrimination with the Equal Employment Opportunity Commission. 

In the claim, the senior manager provided his proof of competent performance records with regualar merit-based wage increases. To further his cause, he argued his replacement was thirty-years his junior. A lawsuit followed, which alleged the senior manager was due lost wages, benefits, and compensation for emotional distress incurred in the wake of his termination. 

As a business owner you felt your company behaved fairly and followed proper protocol and procedures in the course of his termination. Nonetheless, the lawsuit is before you and the finality of the truth is obvious: To either pursue the case and defend your business or reach an out of court settlement will ultimately cost valuable resources and time. 

Though you felt justified and accurate in your assessment of the senior manager's performance you swallow the horse-sized settlement, lawyer fees and expenses becasue to defend this suit in court could fully deplete what reserves are left to recover, rebuild, and move on. 

This is a tough decision and it's one that is made every single day. In California, for example businesses have a 42% chance of a lawsuit by an employee of former employee. 

Win or lose, court proceedings will drain a company's coffers dry. Therefore, any business moving foward in this highly litigious envieronment runs the risk of suffering greatly without a solid EPLI, or Employment Practices Liabillity Insurance policy. 

A lawsuit is a serious impediment to a company's forward progress. Lawsuits for wrongful termination, harassment, and discrimination are being filed more frequently than ever. At a time in which federal, state, and local statues are increasingly complex employers often get little sympathy from judges, if at all. Moreover, the average equal employment claim can take years to resolve. When peace of mind is so inexpensive, why take the chance?

Meslee Insurance Services has a trained, licensed staff, expierience with Employment Practices Liability Insurance policies that are ready to assist your business stay protecdted. We work with a variety of carriers who specialize in EPLI, which in turn provides buinesses an opportunity to choose the competitive edge. 

 

EMPLOYMENT PRACTICES LIABILITY INSURANCE (EPLI) polices cover:

Employment Practices Liability Insurance covers companies and employers against lawsuits or claims filed by past employees, employment candidates, and current employees. Some of the risks that coverage is extended to are:

  • Wrongful Termination
  • Sexual Harassment 
  • Discrimination
  • Negligent Promotion or Retention
  • Wrongful refusal to hire
  • Slander
  • Defamation
  • Libel 
  • Invasion of Privacy
  • Prior Acts
  • Options for Punitive Damages Coverage
  • Options for Third-party EPLI
  • And more...

 

The Math: Does EPLI makes sense?

The examples below illustrate the varied costs associated with resolving Employment Practices Liability chareges. 

 

Example 1:

An employee sues you for wrongful termination, race, discrimination, and defamation. You resolve the matter through mediation.

  • Settlement after mediation $25,000
  • Defense fees and costs: $36,000
  • Total costs: $61,000

 

Example 2:

A former emplyee sues for sexual discrimination and violation fo the Equal Pay Act. You decide to resolve the matter by settling with the employee out of court. 

  • Settlement after mediation: $63,000
  • Settlement: $75,000
  • Defese fees and costs: $40,000
  • Total costs: $115,000

 

Example 3:

A former employee sues you for wrongful termination. You decide to go to court and you lose the case. 

  • Jury awards $105,000 in past earnings
  • Jury awards $100,000 in front pay
  • Jury Awards $250,000 for mental anguish
  • Total costs: $455,000

 

Example 4:

An employee sues you for wrongful termination and sexual harassment. You decide to go to court and you win the case! 

  • Defense costs: $100,000
  • Time lost: 3 years
  • Final costs: $100,000 plus 3-years time. 
 
Additional Information:
  • EPLI rates vary depending on a number of factors including but not limited to the size of a company, years in business, type of business or industry, number of employees, business location, number of previous claims and lawsuits, and more... 
  • Please visit our insurance Glossary Tab for a full list of insurance terms and definitions. 
  • There are many discounts available to help reduce your premium. Please visit our learning insurance discounts page to find out how to maximize your savings.

*This page contains only a general description of coverages and is not a contract. Details of coverage or limits may vary in some states and by carrier. All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements. 

*The newsletters and articles on this website are offered for general information and educational purposes. They are not offered as and do not constitute legal advice or legal opinions. The website contains many pages of hyperlinks to other resources on the Internet. These links are provided as citations and aids to help you identify and locate other Internet resourses that may be of interest, and are not intended to state or imply that Meslee Insurance sponsors, is affiliated or associated with, or is legally authorized to use any trade name, registered trademark, logo, legal or offical seal, or copyrighted symbol that may be reflected in the links. 

*All characters appearing in this work are fictitious. Any resemblance to real persons, living or dead, is purely coincidental.


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